NAIFA Sees 2 Paths for MLR Battle

WASHINGTON -- The National Association of Insurance and Finance Advisors (NAIFA) is hoping the courts will kill the Patient Protection and Affordable Care Act (PPACA), but it is keeping up pressure on the medical loss ratio (MLR) front, just in case.

“The medical loss ratio [mandate] threatens a service industry of 450,000 people who are without alternative means of insuring that consumers received personalized assistance,” Diane Boyle, an assistant vice president at NAIFA, Falls Church, Va., said here during a panel discussion at NAIFA's annual meeting.

Lawmakers in the House appear to have mustered strong support for an MLR fix bill, but "the Senate has been reluctant to move forward with the bill," Boyle said.

The main PPACA MLR provision requires insurers to spend 85% of large group revenue and 80% of individual and small group revenue on health care and quality improvement efforts. HHS is classifying producer compensation as an administrative expense; producers say commissions should be left out of the MLR formula, because consumers are the ones who really pay the commissions.

Producers have reported that insurers are using the PPACA MLR provision to justify cutting individual and small group producer commission rates as much as 50%.

Some PPACA opponents are hoping they can overturn the entire act by using questions about the constitutionality of a PPACA provision that is set to require many individuals to own a minimum level of health insurance starting in 2014.

Some federal appellate courts have declared the individual health insurance ownership mandate to be constitutional; others have found the provision to be unconstitutional.

If the Supreme Court finds the individual mandate provision to be constitutional, then NAIFA, Falls Church, Va., will support “passable modifications” to the law to get an MLR fix implemented, Boyle said.